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Biden to raise taxes on wealthy to save Medicare through 2050

President Biden plans to raise taxes on the wealthy to pay for Medicare

President Joe Biden says his plan to raise taxes on the wealthy will have saved Medicare from bankruptcy and he accuses Republicans of wanting to “destroy” the program by cutting its benefits.

In an op-ed published Tuesday in The New York Times, Biden says “the budget I’m releasing this week will make the Medicare trust fund solvent beyond 2050 without cutting benefits one penny.”

He will unveil his full budget Thursday during a trip to Philadelphia.

But parts of his plans are released ahead of time, including his proposal for the rights program.

President Biden plans to raise taxes on the wealthy to pay for Medicare

President Biden plans to raise taxes on the wealthy to pay for Medicare

Biden is proposing to raise taxes on those earning more than $400,000 to 5% from 3.8% and expand Medicare’s ability to negotiate lower costs for prescription drugs, according to details released by the House. White.

“This modest increase in Medicare contributions from those with the highest incomes will help keep the Medicare program strong for decades to come,” Biden writes.

His plan will run into trouble in Congress where Republicans control the House and Democrats have a slim majority in the Senate.

Republicans have yet to release their own budget plan.

House Speaker Kevin McCarthy is almost certain to oppose Biden’s. And congressional Republicans will this week highlight the tax increases Biden is proposing in his budget proposal, betting their arguments will sway voters at a time when inflation continues to hurt consumer pockets.

But Biden’s plan will appeal to older Americans, who have expressed concern about the stability of the program.

As he prepares for his re-election campaign, Biden has drawn contrasts with Republicans in Congress, some of whom are seeking to dramatically cut federal programs.

It’s a call to older voters, who are generally reliable to show up at the polls, ahead of the 2024 presidential race.

Biden, in his op-ed, also attacked Republicans, saying they want to “destroy” Medicare by cutting its benefits.

“My Republican friends say the only way to be serious about preserving Medicare is to cut benefits, including making it a voucher program that’s worth less and less every year. Some have threatened our economy unless I agree to receive cuts,” he wrote.

“Only in Washington can people pretend they’re saving something by destroying it.”

Forecasters warn that Medicare will begin to face problems in five years.

The Center on Budget and Policy Priorities has found that after 2028 the “Part A” compensation program, which reimburses hospital care, will see its funds slowly dwindle – unable to keep up with demand. After 2028, Medicare could only pay about 90% of hospital coverage, and that percentage would decline over time.

About 60 million seniors rely on Medicare for their health insurance.

House Republicans have yet to release their budget plan, but Speaker Kevin McCarthy will certainly oppose Biden's plan

House Republicans have yet to release their budget plan, but Speaker Kevin McCarthy will certainly oppose Biden’s plan

Currently, for Medicare, most employers and workers each pay a payroll tax of 1.45% for a total of 2.9%. The self-employed pay both sides of the tax.

Individuals earning over $200,000 and married couples earning over $250,000 pay an additional 0.9% on money above these thresholds for a total of 3.8%.

House Budget Committee Chairman Jodey Arrington, R-Texas, who writes his party’s budget plan, said Biden’s plans would see inflation soar.

“We’re going to see a budget that continues to raise taxes and continues to spend taxpayers’ money, and continues to make this 15th straight month of inflation persist,” Arrington said.

Biden laid the groundwork for his upcoming budget in his State of the Union address last month and in other recent speeches. He pledged to cut deficits by $2 trillion over 10 years, strengthen Social Security and Medicare, and limit tax increases to people earning more than $400,000.

His plan is in some ways far more ambitious than what he proposed in 2021, when his budget would have reduced debt by $1 trillion over 10 years compared to projections.

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